Introducing the Intensive Outpatient Program: A Milestone in Medicare Behavioral Health Coverage

The Centers for Medicare & Medicaid Services (CMS) has proposed a significant new development in the 2024 Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) regulations for the 2024 calendar year (CY): the Intensive Outpatient Program (IOP).

This comprehensive healthcare initiative aims to fill one of the primary gaps in behavioral health coverage under Medicare. The proposal outlines the IOP’s scope, doctor certification requirements, billing and coding protocols, and payment rates. IOP services could be extended to hospital outpatient departments, Community Mental Health Centers (CMHCs), Federally Qualified Health Centers (FQHCs), and Rural Health Clinics (RHCs), subject to the finalization of the proposal.

What is the scope of IOP services?

The IOP, as outlined by CMS under the directive of Section 4124 of The Consolidated Appropriations Act (CAA) of 2023, is designed to provide psychiatric services to people suffering from acute mental illnesses or substance use disorders. It will function as an organized and distinct outpatient initiative, offering a range of behavioral health services that will be charged on a per-diem basis. These charges will be under the OPPS or other relevant payment systems when provided in designated settings, such as hospital outpatient departments, CMHCs, FQHCs, and RHCs. The cost per diem of IOP services will be based on those that have been and continue to be covered by Medicare as part of the Partial Hospitalization Program (PHP) benefit – or under the broader OPPS.

Amendments brought forward by Section 4124(a) of the CAA for 2023, in Section 1861(ff)(1) of the Social Security Act, necessitate a physician’s involvement in IOP implementation. Under the proposed regulation, a doctor will need to ascertain that each patient requires at least nine hours of IOP services per week. This certification process will have to be repeated no less frequently than every other month. CMS is looking to enshrine this rule in the regulations governing IOP provisions across all settings and is currently seeking public commentary on the recertification period.

The IOP’s establishment under Medicare will contribute significantly to expanding access to necessary behavioral healthcare, creating an inclusive, robust system that can cater to the diverse needs of Medicare beneficiaries.

CMS welcomes your thoughts and contributions to the ongoing discussion on this proposed rule.